Customs Authority Eyes Mid-level Taxpayers

Authority has hired personnel for a new branch and is looking for a location

The Ethiopian Revenue & Customs Authority is set to open a new branch office designated exclusively for middle-level taxpayers.

The authority has hired personnel for the new branch office and is looking for a convenient area for taxpayers to settle their taxes.

Although parameters for a threshold have been set, which is annual revenue, the middle-level taxpayers that the branch will cater to have not been defined.

“What we are looking for is a more efficient delivery of service to the middle-level taxpayers,” says Yoseph Shiferaw, customer service director at the authority. “This level is important as it is a transition from the small level to the large taxpayer.”

Small taxpayers that have annual revenues of no more than half a million Birr a year account for 70pc of the total taxpayer base in the country. The Authority plans to limit the number of large taxpayers to one percent of the overall base.

The main reason behind the need for the creation of the middle taxpayers class is the load on Addis Abeba’s West and East branches, according to Yoseph.

“We are working on differentiating the middle taxpayers to be included as a tax category,” said Yoseph. “We plan to announce to the public ones we conclude.”

The initiative for the new structure came from the Organisation for Economic Co-operation & Development, an intergovernmental organisation of 36 nations founded over a century ago to stimulate economic progress and trade across the world.

“Those of whom who have filed a complaint will be segmented once they finalise the issue,” Yoseph told Fortune. “We are working to solve the complaints before the new office starts operation.”

Experts have been critical of the move.

“It is reasonable to create a new taxpayers office,” said Yohannes Woldegebriel, an individual with wide experience in tax laws, told Fortune. “The authority should instead work towards delivering specialised services.”

The authority currently has close to 30,262 federal taxpayers.

“If they want to change the level of taxpayers, they need to amend the directive first,” Yohannes said.

The authority collected 175 billion Br in the last fiscal year, achieving 76.5pc of its planned target. It plans to collect over a third of the federal government’s 346.9 billion Br budget in the current fiscal year.

“The authority should give attention to broadening its tax base and decreasing the cost of tax collection,” Yohannes advised.

The major amendment to the tax law came last year. It bumped the annual incomes of the category “B” middle-level taxpayers between half a million Birr and a billion Birr.


Published on Aug 18,2018 [ Vol 19 ,No 955]



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